Tuesday, July 31, 2012

GOP dogma goes like this: government regulation is excessive, a drag on the economy, an impediment to growth. For the GOP that's a 'given', an article of faith! Reagan's solution was a 30% tax cut which primarily benefited ONLY the nation's 'elite'. It is without doubt the origin of the so-called 'ruling 1 percent'.

Occassionally one runs across one or two paragraphs that simply 'hit the nail on the head'. Following are two that do precisely that. The topics are Ronald Reagan and 'trickle down theory':

"Tax relief for the rich would enable them to spend and invest more. This new spending would stimulate the economy and create new jobs. Reagan believed that a tax cut of this nature would ultimately generate even more revenue for the federal government. The Congress was not as sure as Reagan, but they did approve a 25% cut during Reagan's first term.

The results of this plan were mixed. Initially, the FEDERAL RESERVE BOARD believed the tax cut would re-ignite inflation and raise interest rates. This sparked a deep recession in 1981 and 1982. The high interest rates caused the value of the dollar to rise on the international exchange market, making American goods more expensive abroad. As a result, exports decreased while imports increased. Eventually, the economy stabilized in 1983, and the remaining years of Reagan's administration showed national growth."

--The Reagan Years, Reaganomics

In a phrase: wealth did not 'trickle-down'. Instead --wealth literally flowed upward as only the upper quintile benefited from Reagan's tax cuts. Investment in the U.S. economy did not increase as we had been told it would! It is safe to say that 'investments' in offshore bank accounts enjoyed a boom! That the Regan tax-cut was followed by recession/depression of some two years --the deepest/longest since Hoover --is proof enough that none of the 'tax cut' benefited working Americans in any way whatsoever.

The right wing is heavily 'invested' in 'trickle-down' economics. Some may truly believe that unfair tax cuts will stimulate the economy. I have given this group the benefit of doubt. But one is tempted to put one's hard-earned tax cut on the truth of this assertion: GOP tax cuts have, in fact, been the root cause of every GOP depression/recession since 1900!

When the GOP eschews its creation of the 'ruling 1 percent', I will begin to take them seriously.